Oriola achieves logistics synergy in healthcare

Pharmaceutical distribution requires powerful software in order to handle the large transaction volumes created in day-to-day business

Risto Kanerva, President of Oriola explains that IBS pharmaceutical software has helped the company streamlines supply chain processes.

With 80,000 order lines per day, Oriola, a leading Finnish wholesaler and distributor of pharmaceuticals and healthcare products, had a giant task on its hands. How would the company replace a highly functional but technologically obsolete system with a standard enterprise resource planning (ERP) system – without losing its 15,000 customers during the process? After a comprehensive vendor study and selection process, Oriola deemed IBS Pharma software solution the best fit, and it has been running live successfully since November 2004.

Origins in logisics and distribution

Oriola’s main selection criteria for an ERP partner were high performance, one-stop-shop customer interface, one system across business functions, streamlined operations, stability and reliability, continuity, and assured delivery. In fact, Oriola was the first company ever to implement IBS Pharma since its rollout the same year. Oriola project manager Hele Lonka says the company chose the software because of the promised future co-operation in product development, as well as its performance and functionality.

“During implementation, it is crucial that you don’t have to struggle with system performance. And since our goal was not to improve operations at the time, but to keep present functionality working well, we really depended on the system to do the job. We were pleased with the results.”

Risto Kanerva, managing director of Oriola, adds the main reason the company chose IBS was due to the application’s origin in logistics and distribution. “This is different from IBS’ competitors, who have solutions geared more towards manufacturing and production businesses. But the IBS solution has excellent distribution applications. That made it easy to choose. In fact, the pharma portion of the software was an added benefit.”

Value-added services

“But what we are really excited about is the fact that we now have a platform that we can build new value added services and new applications on,” he adds.

His colleague VP of Logistics Seppo Hakanpää attests to this fact. “Our old IT environment had too many separate software systems, and there was no upgrading possible. We had too many interfaces among the many variants of existing software. But these problems are now solved with this new software. The quantity of different software has been reduced. We now have single-packet solutions as well as real-time visibility to and synchronisation of key business documents and supply chain data, such as vendor and customer information, pricing, inventory, orders, returns and contracts.”

“And I like the fact that now we have a single user interface. It’s easier to teach new operators how to use the system with one-single software and one-graphic user interface,” Hakanpää continues.

Optimized business processes

IBS Pharma software fits Oriola’s requirements like a glove. It has modules for sales order management that automatically streamlines order entries and integrates them with warehousing, logistics and invoicing. The software also includes invoicing and financial modules that provide on-demand integrated invoicing and accounting based on real-time information; warehouse management, picking and delivery, purchasing, returns and alert management, business analysis, e-business and CRM. But best of all, according to Oriola, it speeds up sales and purchase processing, optimises stock, minimises errors and enhances logistics planning.

The new software is the right prescription for Oriola’s wholesale business requirements. With the company’s annual revenue of 600 million euros, and 20 million order lines per year (80,000 per day), fast order cycles and high order processing volumes were a prerequisite when choosing IBS Pharma.

One system

Kanerva is satisfied with the new business solution. “This functionality allows us to use one system for all of our business areas. So, the main benefits from this application take care of all specific needs for this healthcare business.”

Lonka points out pharmacies are Oriola’s largest customer bases, in terms of order lines. “We compete by trying to get the distribution task for pharmaceutical companies. But of course, there are other benefits received with an integrated system,” she says. “It is simpler, you are not so dependent on one or two key persons, the organisation works better together, it is more convenient – you don’t have to involve all departments. And it makes it possible to introduce new ways of doing things across different functions.”

Effective order picking

Oriola receives 80 percent of its order lines electronically, and more than 50 percent of the order lines are picked automatically. Order fulfilment throughput time is between 30 to 60 minutes. And the average is 8.4 packages per line. Its employees located in Finland, Baltic, Sweden and Denmark operate out of nine sites including a central warehouse in Espoo, and four distribution centers in Finland.

“The new system works well and it is nice to know that we have a pro-active supervising function for orders and picking interfaces. IBS is supervising it 24 hours a day and actively 12 hours a day,” adds Lonka.

Oriola expects IBS Pharma to continue its future development according to the specific needs of the pharmaceutical industry, side by side with the best practices in the distribution industry in general. Oriola is in the midst of putting together a new company IT strategy. Once this is in place, one of the future visions is to integrate the software to its suppliers and customers in both directions. It also wants to expand the solution to its Baltic countries in the near future. Currently, IBS is also supplying management services of the solution.